These documents have been translated from Japanese originals for reference purposes only.
In the event of any discrepancy between these translated documents and the Japanese originals, the originals
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translations.

(Securities Code 9301)
June 7, 2017
To Shareholders with Voting Rights:
Akio Matsui
President
Mitsubishi Logistics Corporation
19-1, Nihonbashi, 1-chome, Chuo-ku,
Tokyo, JapanNOTICE OF
THE 214TH ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
You are cordially invited to attend the 214th Annual General Meeting of Shareholders of Mitsubishi Logistics
Corporation (the “Company”). The meeting will be held for the purposes as described below.
If you are unable to attend the meeting, you can exercise your voting rights in writing by submitting the Voting
Rights Exercise Form, or via the Internet, etc. Please review the Reference Documents for the General Meeting of
Shareholders (pages 43 through 49), and return your form no later than 5 p.m. Japan time on Wednesday, June 28,
2017, or cast your vote via the Internet, etc., by 5 p.m. Japan time on Wednesday, June 28, 2017.
(Please refer to the page 50 for the detailed procedures for exercising voting rights via the Internet, etc.)
1. Date and Time:Thursday, June 29, 2017 at 10 a.m. Japan time

2. Place:

Nihonbashi Dia Building, Headquarters of the Company
19-1, Nihonbashi, 1-chome, Chuo-ku, Tokyo, Japan

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for theCompany’s 214th Fiscal Year (April 1, 2016 - March 31, 2017) and resultsof audits by the Accounting Auditor and the Board of Corporate Auditors of
the Consolidated Financial Statements
2. Non-consolidated Financial Statements for the Company’s 214th Fiscal
Year (April 1, 2016 - March 31, 2017)
Proposals to be resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Reverse Stock Split
Proposal No. 3: Election of Fourteen (14) Directors
Proposal No. 4: Payment of Bonuses to Directors

1

4. Information on Exercise of Voting Rights(1) If you vote both in writing on the Voting Rights Exercise Form and via the Internet, only your vote placed via
the Internet will be valid.
In addition, if you submit your vote multiple times via the Internet, only the last vote will be valid.
(2) If you are unable to attend the meeting, you can exercise your voting rights by proxy by appointing anothershareholder with voting rights as proxy and submitting a document that attests the power of proxy.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk.
Any updates to the Reference Materials for the General Meeting of Shareholders, the Business Report, theConsolidated Financial Statements and Non-consolidated Financial Statements will be posted on the “Investor
Relations” on the Company’s website (http://www.mitsubishi-logistics.co.jp/english/ir/index.html).

2

(Appendix)

Business Report(April 1, 2016 - March 31, 2017)

I. Overview of the Company Group
1.
(1)

Business Progress and Results
Business Conditions
During the fiscal year under review, in the global economy, steady economic recovery continued in the
United States while the recovery in Europe remained moderate and there was a sign of recovery in China.
Japan, meanwhile, sustained a moderate recovery with improved employment environment and a sign ofrecovery in consumer spending and capital expenditure.
In these economic situations, the business environment surrounding the Group remained difficult. In thewarehousing and harbor transportation business in the Logistics Segment, the competition with othercompanies has intensified despite the recovery trend seen in cargo movement. In the Real Estate Segment,
the rent level did not recovered despite improvement in demand for rental office buildings.
Under these circumstances, Mitsubishi Logistics Corporation and its subsidiaries and affiliates(collectively, the “Group”) promoted aggressive marketing activities. In the Logistics Segment, we madeefforts including the expansion of distribution operations especially for pharmaceuticals, and expansion
reinforcement of operational bases overseas. In the Real Estate Segment, we focused our efforts on securing
tenants, and maintaining and improving rent levels. Meanwhile, we endeavored to improve businessperformance thorough cost management and further improvement of efficiency in business operations.
As a result, revenue for the fiscal year under review amounted to 208,718 million yen, an increase of
1,886 million yen, or 0.9% from the previous fiscal year. In the Logistics Segment, freight handled increasedin the warehousing & distribution, land transportation and harbor transportation businesses, although revenue
decreased in the international transportation business owing to factors such as a decline in ocean freight andthe effects of a stronger yen. In the Real Estate Segment, revenue increased due to an increase incondominiums sold. On the other hand, cost of services overall decreased 264 million yen, or 0.1% from theprevious fiscal year to 185,573 million yen. In the Logistics Segment, operational and transportationconsignment costs decreased as revenue in the international transportation business decreased while
depreciation and amortization expenses decreased in both the Logistics and Real Estate Segments. In the Real
Estate Segment, real estate sales costs increased in line with sales of condominiums increased. Due to factors
such as an increase in the external standard tax portion of enterprise tax, selling, general and administrative
expenses amounted to 10,396 million yen, an increase of 712 million yen, or 7.4% from the previous fiscal
year.
As a result, operating income increased 1,439 million yen, or 12.7% year on year to 12,748 million yen,reflecting the rise in revenue in both the Logistics Segment and the Real Estate Segment. Ordinary income
increased 2,031 million yen, or 14.5% to 16,056 million yen due partially to foreign exchange gains at an
overseas consolidated subsidiary. Profit attributable to owners of parent increased 1,314 million yen, or
14.1% from the previous fiscal year to 10,665 million yen despite a decrease in gain on sale of marketablesecurities and investments in securities in extraordinary income, which was offset by lower impairment loss
in extraordinary loss and the effects of a decrease in the effective corporate tax rate.
Performance by business segment of the Group was as follows.
1) Logistics Segment
In the warehousing & distribution business and land transportation business, transactions for medical
products and beverages, etc. were strong, resulting in revenue to rise 0.8% from the previous fiscal year to49,541 million yen in the warehousing & distribution business, and revenue in the land transportation
business increased by 4.0% from the previous fiscal year to 45,732 million yen. In the harbor transportation
business, revenue increased by 8.8% from the previous fiscal year to 22,994 million yen due mainly to anincrease in container freight handling volume. However, in the international transportation business, factors
such as a decline in ocean freight and the effects of a stronger yen contributed to a 10.1% decline in revenue
from the previous fiscal year, to 44,146 million yen.
As a result, overall revenue in the Logistics Segment was 167,907 million yen, down 1,099 million yen,or 0.7% from the previous fiscal year. Additionally, operating expenses were down by 2,180 million yen, or3

1.3%, from the previous fiscal year to 161,245 million yen due mainly to a decrease in operational andtransportation consignment costs as revenue in the international transportation business decreased, andreduced depreciation and amortization expenses. Due to the above, operating income was 6,661 million yen,
an increase of 1,081 million yen, or 19.4% from the previous fiscal year.
2) Real Estate Segment
In the mainstay real estate leasing business, revenue declined 1.8% from the previous fiscal year to30,355 million yen due mainly to a decrease in ancillary revenue such as electrical power fees. Other revenue
increased by 39.9% from the previous fiscal year to 12,539 million yen due to an increase in property sales in
the condominium sales business.
As a result, overall revenue in the Real Estate Segment was 42,894 million yen, up 3,017 million yen, or7.6% from the previous fiscal year. Additionally, operating expenses were up by 1,912 million yen, or 6.5%
from the previous fiscal year to 31,174 million yen, primarily due to a rise in real estate sales costs as sales ofcondominiums increased, an increase in repair expenses in line with property maintenance, and a decrease indepreciation and amortization expenses. Due to the above, operating income was 11,719 million yen, an
increase of 1,104 million yen, or 10.4% from the previous fiscal year.
Revenue by segment

Categories

Fiscal year
ended March
31, 2017
167,907[49,541][45,732][22,994][44,146][5,493]42,894[30,355][12,539](Millions of yen unless otherwise stated)
Year-on-year change
Fiscal year
ended March
Percentage
Amount31, 2016(%)
169,006(1,099)(0.7)[49,127]
[414]
[0.8]
[43,969][1,762][4.0][21,127][1,867][8.8][49,124][(4,978)][(10.1)][5,658][(164)][(2.9)]
39,8763,017
7.6[30,914][(559)][(1.8)][8,961][3,577][39.9]

Logistics Segment[Warehousing & Distribution Business][Land Transportation Business][Harbor Transportation Business][International Transportation Business][Other]Real Estate Segment[Real estate Leasing Business][Other]Elimination of inter-segment(2,083)(2,051)(31)－
transactions
Total
208,718
206,8311,886
0.9(Notes)
1. Elimination of inter-segment transactions refers to the elimination of inter-segment transactions included in
the revenue of the Logistics Segment and Real Estate Segment.
2. In line with diversification of operations in the Logistics Segment, operating revenue previously classified
as “Other” in the Logistics Segment has increased, and from the fiscal year under review, revenue
associated with each business included in “Other” in the Logistics Segment is incorporated into operating
revenue in each business, and for comparison purposes, the same has been applied to the previous fiscal
year.

4

(2)

Capital Investments
The Group made capital investments in the total amount of 27,336 million yen for development andpurchasing of land for warehouses and construction of warehouses and facilities for lease, etc.
The main investments made during the fiscal year under review were as follows.
1) Development completed land
Kobe:
Site for Seishin Distribution Center[Completed in December 2016](within Kobe Logistics Center)22(Planned area: Approx. 55,900 m . Of which, approx. 16,500 m was acquired by2
the previous fiscal year, and approx. 15,200 m was purchased during the fiscal
year under review (see 2) below))2) Purchased land
Indonesia: P.T. Mitsubishi Logistics Indonesia MM2100[Purchased in June 2016]

Distribution Center Site
2

(Approx. 169,800 m )Kobe:

Site for Seishin Distribution Center[Purchased in January 2017](within Kobe Logistics Center)2(Approx. 15,200 m )Tokyo:

Site for Lease office building, 1-chome,[Purchased in March 2017]

Nihonbashi-honcho, Chuo-ku
2(Approx. 950 m . Of which, the Company holds 49% joint equity)
3) Construction completed facilities for lease
Kyoto:

Tokyo:

Kumano Staff Quarters, Kyoto University
Residential units for lease2(five stories, floor area of approx. 7,200 m )Staff quarters and joint research facility, The[Completed in February 2017][Completed in March 2017]

University of Electro-Communications
Residential units and facilities for lease2(five stories and single story, floor area of approx. 16,700 m )4) Warehouses under construction
Indonesia: P.T. Mitsubishi Logistics Indonesia MM2100

Kobe:[Scheduled for completion inDistribution Center
July 2017]
Warehouses(single story, total floor area of approx. 18,000 m2)
Seishin Distribution Center[Scheduled for completion in
March 2018]
Warehouses(four stories, total floor area of approx. 60,500 m2)(3)

Financing
The capital investments and operating capital of the Group were funded by cash on hand.

5

(4)

Future Outlook and Issues
With respect to the prospects of the world economy, the moderate recovery is expected in the UnitedStates and Europe while the economy in China continuously moves toward recovery. Japanese economy isalso expected to recover gradually supported by continuous improvement of employment and income
environment and implementation of various government policies.
In this economic climate, among the business environment surrounding the Group, harsh situations
continue in the warehousing & distribution business and harbor transportation business due to the intensifiedcompetition despite a moderate increase in freight volume. Meanwhile, despite improvement in demand forrental office buildings, the recovery of rent levels will not lead to the improvement of the business conditionin the real estate business.
Under these circumstances, in line with the newly formulated Medium-Term Management Plan
[2016–2018] spanning three years beginning fiscal 2016, the Group will strive for sustainable growth mainly
by further expanding its domestic and overseas integrated logistics business in response to changes incustomers’ global supply chains, and expanding the Real Estate Business with an emphasis on building
leases.
Specifically, we will implement the following measures.
1) In the Logistics Segment, we will expand the domains of our domestic and international logistics
services in tandem by thoroughly placing its first priority on customers. In addition, we will promote
the improvement of the system through reorganization, etc. to reinforce the logistics business baseand improve its service quality while strengthening cost competitiveness.
2) In the Real Estate Segment, we will maintain and improve features and functions of existing rental
properties and expand business to other than building lease in order to secure long-term and stableprofitability.
3) We will promote the reinforcement of Group management, and select and concenter management
resources to enhance overall Group productivity. In addition, we will thoroughly implement risk
management including disaster countermeasures, global environment measures, compliance and CSR
as well as proper capital policy and secure financial soundness, thereby enhancing corporate value.

6

2.

The Group

Trends in Assets and Income
Trends in assets and income of the Group and the Company for the fiscal year under review and the last
three fiscal years are as follows.
(Millions of yen unless otherwise stated)
The 211th fiscal The 212th fiscal The 213th fiscal
Fiscal year
year
year
year
under review
Item(April 1, 2013 - (April 1, 2014 - (April 1, 2015 - (April 1, 2016 March 31, 2014) March 31, 2015) March 31, 2016) March 31, 2017)
Revenue
198,161
204,362
206,831208,718
Operating income
12,148
11,44911,30912,748
Ordinary income
14,113
14,456
14,025
16,056
Profit attributable to owners
8,520
9,133
9,350
10,665of parent
Basic earnings per share
48.62
52.12
53.37
60.88
(yen)
Total assets
396,238
433,041
413,264
435,354
Total net assets
236,641
263,089
257,524
276,870
Revenue
139,075
141,638
144,391
146,896
Operating income
8,861
8,025
8,783
10,284
Ordinary income
10,985
10,88011,492
13,073
Net income
7,789
7,369
8,149
9,074
Basic earnings per share
44.43
42.04
46.49
51.77
(yen)
Total assets
350,321381,937
363,588383,730
Total net assets
218,859
240,665
234,989
252,899

The Company(Notes)
1. Operating income of the Group and the Company decreased in the 212th fiscal year due mainly to posting temporary
expenses arising from new operations and large-scale renovations of warehouses, facilities for lease and officebuildings, and an increase in depreciation.
2. Total assets and net assets of the Group and of the Company in the 213th fiscal year decreased due mainly to adecrease in the valuation amount of stocks.
3. Basic earnings per share of the Group and of the Company are calculated based on the weighted-average number ofshares outstanding during the relevant period and are rounded off to the second decimal place.

7

3.

Material Subsidiaries
Company name

The Company’s
Capitalpercentage of equity(Millions of yen) participation (%)

Fuji Logistics Co., Ltd.

2,979

95.0

Ryoso Transportation Co.,
Ltd.

360

100

Dia Buil-Tech, Co., Ltd.

100

100

Shinryo Koun Co., Ltd.

36

86.0

Mitsubishi Logistics China
Co., Ltd.

RMB250
million100

P.T. Mitsubishi Logistics
Indonesia
Mitsubishi Logistics
America Corporation
Mitsubishi Logistics Europe
B.V.

IDR211,665
million
USD10,000
thousand
EUR2,500
thousand

99.9
100
100

Principal business
Warehousing & Distribution
Business
Land Transportation
Business
Real Estate Managing
Business
Harbor Transportation
Business
Investment in Logistics
Business in China andmanagement of affiliate
logistics companies
Warehousing & Distribution
Business
International Transportation
Business
International Transportation
Business

The number of the consolidated subsidiaries subject to consolidated accounting is 52 including 8 material
subsidiaries shown above, while the number of affiliates subject to the equity method is 3. The majority ofthese companies are engaged in operations and transportation related to the logistics business andmanagement of buildings related to the real estate business.
4.

Principal Business(1) Logistics Segment
1) Warehousing & Distribution BusinessBusiness conducting storage and handling of incoming and outgoing cargo, etc. at warehouses
containing consigned items
2) Land Transportation BusinessBusiness conducting transport and usage transport, etc. by freight automobiles
3) Harbor Transportation BusinessBusiness conducting coastal cargo handling and onboard cargo handling, etc. at ports
4) International Transportation BusinessBusiness conducting handling of international product transport, etc. (including handlingdomestic marine cargo transport)(2) Real Estate Segment
Business conducting consignment, design and oversight of purchase, leasing, management andconstruction of real estate8

5.

Principal Business Locations(1) The Company
Headquarters: Chuo-ku, Tokyo
Branches: Tokyo, Yokohama, Nagoya, Osaka, Kobe and Fukuoka(2) Subsidiaries
1) Logistics Segment
Fuji Logistics Co., Ltd. (Minato-ku, Tokyo)
Ryoso Transportation Co., Ltd. (Koto-ku, Tokyo)
Shinryo Koun Co., Ltd. (Chuo-ku, Kobe)
Mitsubishi Logistics China Co., Ltd. (Shanghai, China)
P.T. Mitsubishi Logistics Indonesia (Jakarta, Indonesia)
Mitsubishi Logistics America Corporation (New York City, State of New York, U.S.A)
Mitsubishi Logistics Europe B.V. (Rotterdam, South Holland, The Netherlands)
2) Real Estate Segment
Dia Buil-Tech, Co., Ltd. (Chuo-ku, Tokyo)

6.

Employees(1) Employees of the Group
Categories
Logistics Segment
Real Estate Segment
Administrative segment,
Headquarters of the Company
Total

Number of employees(Changes from March 31, 2016)
4,048 (decreased 72)
298 (decreased 10)
73 (increased 2)
4,419 (decreased 80)(Notes)1. The figures in the above table do not include 53 persons on leave and seconded outside of theGroup.
2. Separate from the above, there are 1,324 temporary employees and 1,152 seconded andcontracted employees from outside the Group.

(2) Employees of the Company
Number of employees (Changes
from previous fiscal year-end)
863 (increased 18)

Average age

Average years of service

39 years,
10 months

16 years, 8 months(Notes)1. The figures in the above table do not include 148 persons on leave and seconded outside of theCompany.
2. Separate from the above, there are 116 temporary employees and 563 seconded and contracted
employees from outside the Company.
3. Average ages and average years of service are rounded to the nearest month.

7.

Material Lenders
LenderThe Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Norinchukin Bank
Mitsubishi UFJ Trust and Banking Corporation

9

Amount of borrowings(Millions of yen)
19,1934,720
3,575

II. Status of Shares
1.
Matters concerning Shares(1) Total number of shares authorized to be issued

440,000,000 shares(2) Total number of shares outstanding, capital and number of shareholders
Current fiscal
Previous fiscal
Item
year-end
year-end
Total number of shares outstanding
175,921,478
175,921,478(shares)
Capital (yen)22,393,986,570
22,393,986,570
Number of shareholders (persons)
6,430
6,767

Changes from theprevious fiscal year-end
00
337 (decreased)(Note) Total number of shares outstanding includes 659,143 shares of treasury shares.

(3) Major shareholders
Shareholder name

Number of shares

Shareholding ratio%

Thousand shares

The Master Trust Bank of Japan, Ltd. (trust account)
Japan Trustee Services Bank, Ltd. (trust account)
Meiji Yasuda Life Insurance Company
MITSUBISHI ESTATE CO., LTD.
Kirin Holdings Company, Limited
Tokio Marine & Nichido Fire Insurance Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
ASAHI GLASS CO., LTD.
Mitsubishi Corporation
Trust & Custody Services Bank, Ltd. (Securities Investment
Trust Account)(Notes)1.
2.

18,016

10.3

13,349
9,707
7,331
5,932
5,831
3,728
3,315
3,205

7.6
5.5
4.2
3.4
3.3
2.1
1.9
1.8

3,134

1.8

The Bank of Tokyo-Mitsubishi UFJ, Ltd. has set 1,500 thousand shares of the Company as trust funds for retirement
benefits for which voting rights are reserved, in addition to the shares stated in the table above.
The Company’s treasury shares (659,143 shares) were excluded in the calculation of the percentage of shares held.

102. Company Officers(1)

Directors and Corporate Auditors
Position
Chairman of the Board

Tetsuro Okamoto

President *Akio Matsui

Managing Director

Kazuhiko Takayama

Managing Director

Takanori Miyazaki

Managing Director

Yoshiji Ohara

Managing Director

Noboru Hiraoka

Managing Director *Fumihiro Shinohara

Director

Minoru Makihara

Director

Shigemitsu Miki

Director

Koji Miyahara

Director

Yasushi Saito

Director

Hitoshi Wakabayashi

Director

Tomohiko Takami

Director

Masao Fujikura

Standing Corporate
AuditorStanding Corporate
AuditorCorporate Auditor

Areas of responsibility or significant
concurrent positions

Name

Responsible for Warehousing &Distribution BusinessResponsible for Accounting & Financing,
Information System, Technical and Real
Estate BusinessResponsible for Harbor Transportation
Business
Responsible for International
Transportation BusinessResponsible for General Affairs, Corporate
Communications, Personnel, Planning, andInternal Audit
Senior Corporate Advisor, Mitsubishi
Corporation
Senior Advisor, The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Board Counselor, Nippon Yusen Kabushiki
KaishaGeneral Manager, Accounting & Financing
Division
General Manager, Warehousing &Distribution Business Division
General Manager, International
Transportation Business Division
General Manager, Osaka Branch

Tohru Watanabe
Yoshihito Yoshizawa
Yohnosuke Yamada

LawyerCorporate Auditor

Kenji Sakurai

Corporate Auditor

Hiroshi Imai

Certified Public Accountant
Standing Auditor, FUJI LOGISTICS CO.,
LTD.

11

(Notes)

1.
2.

3.

4.
5.
6.

7.

(2)

Directors with an asterisk (*) are representative directors.
Of Directors, Mr. Minoru Makihara, Mr. Shigemitsu Miki and Mr. Koji Miyahara are Outside Directors
as stipulated by Article 2, Paragraph 15 of the Companies Act. The Company designated them as
independent officers as stipulated by Tokyo Stock Exchange, Inc. and registered them with the said
Exchange.
Of Corporate Auditors, Mr. Yoshihito Yoshizawa, Mr. Yohnosuke Yamada and Mr. Kenji Sakurai are
Outside Corporate Auditors as stipulated by Article 2, Paragraph 16 of the Companies Act. The Company
designated them as independent officers as stipulated by Tokyo Stock Exchange, Inc. and registered themwith the said Exchange.
Corporate Auditor Mr. Kenji Sakurai is a Certified Public Accountant and has a considerable knowledge
regarding finance and accounting.
In addition to the above, the significant concurrent positions of Outside Officers are stated in “(3)Matters concerning Outside Directors” and “(4) Matters concerning Outside Corporate Auditors” below.
The Directors and Corporate Auditors who retired during the fiscal year under review were as follows (retired
on June 29, 2016).
Director Yuichi Hashimoto
Director Yoshinori Watabe
Director Masato Hoki
Director Yoichiro Hara
Corporate Auditor
Shunkyo Harada
Of Directors shown above, positions and responsibilities were changed as follows on April 1, 2017.
(Old positions)(New positions and responsibilities)
Managing Director Kazuhiko Takayama
Director ( ― )Director
Hitoshi Wakabayashi
Managing Director (Responsible for Warehousing &Distribution Business)
Director
Masao Fujikura
Managing Director (General Manager, Osaka Branch)Compensation to Directors and Corporate Auditors for the Fiscal Year under Review
Amount of payment
Categories
Number of persons paid
(Millions of yen)
Directors
18
440(of which, Outside Directors)(3)(28)
Corporate Auditors
6
61(of which, Outside Corporate Auditors)(3)(35)(Notes)

1.

2.

3.

Amount of payment above includes Directors’ bonuses in the total amount of 50 million yen(including the amount of 4 million yen to Outside Directors) which will be paid subject to the approval
and resolution of Proposal No. 4 “Payment of Bonuses to Directors” at the 214th Annual General
Meeting of Shareholders to be held on June 29, 2017.
In addition to the amounts in the above table, to Directors concurrently serving as employees (5 persons
during the fiscal year under review), the portions of their remuneration as employees of 61 million yen
were paid.
The upper limit on total compensation for Directors is 38 million yen per month (of which, 3 million
yen per month for Outside Directors; resolved at the 209th Annual General Meeting of Shareholders heldon June 28, 2012; not including the portion of employees’ salary for Directors who concurrently serve as
employees), while 7 million yen per month for Corporate Auditors (resolved at the 203rd Annual
General Meeting of Shareholders held on June 29, 2006).

12

(3) Matters concerning Outside Directors
1) Significant concurrent positions at other corporations, etc.
Name
Company name
Minoru Makihara
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Shigemitsu Miki
Mitsubishi Electric Corporation
Koji Miyahara
Toho GAS Co., Ltd.
(Notes)

1.
2.
3.

Title
Outside Director
Outside Director
Outside Director

Mr. Shigemitsu Miki retired as Director of Mitsubishi Electric Corporation on June 29, 2016.
The Company has transactions such as logistics operation consignment, etc. with Mitsubishi UFJ
Morgan Stanley Securities Co., Ltd.
The Company has transactions such as logistics operation consignment, etc. with Mitsubishi Electric
Corporation.

2) Main activities
During the fiscal year under review, the Company held 12 meetings of the Board of Directors. Mr.
Minoru Makihara participated in 11 meetings, Mr. Shigemitsu Miki in 10 meetings, and Mr. Koji
Miyahara in 10 meetings. Outside Directors stated invaluable opinions based on their distinguishedinsight and broad perspectives.
(4) Matters concerning Outside Corporate Auditors
1) Significant concurrent positions at other corporations, etc.
Name
Company nameSANYO TRADING CO., LTD.
Yohnosuke Yamada
KANEMATSU CORPORATION
Rhythm Watch Co., Ltd.
Kenji Sakurai(Notes)

1.
2.
3.
4.

Japan Drilling Co., Ltd.

Title
Outside Director
Outside Audit &Supervisory Board Member
Auditor (External)
Audit & Supervisory Board
Member (External)

Mr. Kenji Sakurai retired as Director of Rhythm Watch Co., Ltd. on June 22, 2016.
The Company has transactions such as logistics operation consignment, etc. with SANYO TRADING
CO., LTD.
The Company has transactions such as logistics operation consignment, etc. with KANEMATSU
CORPORATION.
The Company has transactions such as logistics operation consignment, etc. with Japan Drilling Co.,Ltd.

2) Main activities
During the fiscal year under review, the Company held 16 meetings of the Board of Corporate Auditors.
Mr. Yoshihito Yoshizawa participated in 16 meetings, Mr. Yohnosuke Yamada in 14 meetings, and Mr.
Kenji Sakurai in 16 meetings. During the fiscal year under review, the Company held 12 meetings of theBoard of Directors. Mr. Yoshihito Yoshizawa participated in 12 meetings, Mr. Yohnosuke Yamada in 10
meetings, and Mr. Kenji Sakurai in 12 meetings. Each of Outside Corporate Auditors stated invaluable
opinions from an objective and professional standpoint backed by their accumulated experiences as amanager at a trading firm, a lawyer, and a certified public accountant, respectively.

13

3.

Accounting Auditor(1)

Accounting Auditor’s Name
KPMG AZSA LLC(2)Compensation for Audit Service Set Forth in Article 2, Paragraph 1 of the Certified Public
Accountants Act
64 million yen(Notes)
1. Upon confirming the content of the audit plan, the conditions of the execution status of theaccounting audit, and the assumptions for calculating remuneration estimates, etc., of the
Accounting Auditor, the Board of Corporate Auditors has given its approval under Article 399,
Paragraph 1 of the Companies Act for the remuneration, etc., of the Accounting Auditor.
2. Under the audit agreement between the Company and its Accounting Auditor, compensation foraudits pursuant to the Companies Act and audits pursuant to Financial Instruments and Exchange
Law are not strictly separated, and otherwise cannot be separated. Consequently, the above amountreflects total compensation.

(3)

Cash and other profits payable by the Company or its subsidiaries to Accounting Auditor
77 million yen(Note)
Of significant subsidiaries of the Company, Mitsubishi Logistics China Co., Ltd., P.T. Mitsubishi
Logistics Indonesia, and Mitsubishi Logistics Europe B.V. receive audits (limited to stipulations of theCompanies Act and the Financial Instruments and Exchange Act (including laws and regulations ofother countries corresponding to these laws)) from accounting auditors (including entities possessing
qualifications in other countries corresponding to these qualifications) separate from the Accounting
Auditor of the Company.

(4)

Policy Regarding Determination of Termination or Nonrenewal of Appointment of Accounting
AuditorAside from termination of the Accounting Auditor by the Board of Corporate Auditors as defined in
Article 340 of the Companies Act, should the Accounting Auditor be deemed unable to execute its duties
properly and the replacement of the Accounting Auditor be deemed necessary, the Company shall submit the
proposal to terminate or not reappoint the Accounting Auditor to the General Meeting of Shareholders, basedon a resolution of the Board of Corporate Auditors.

14

III.
1.

Company’s Systems and Policies
System to ensure that Directors execute their duties in compliance with laws and regulations and the
Articles of Incorporation and other systems to ensure proper business execution
As rules and a charter to be strictly followed by executives and employees during the course of executing
duties, the Company has formulated a “Code of Conduct” as described below, and clearly states its position
to actively work toward thorough compliance with related laws, in addition to environmental protection andsocial contribution, etc.
1) The Company will comply with laws and regulations and rules, and execute corporate activities sincerely
and fairly so as not to disrupt societal norms.
2) The Company will disclose corporate information at appropriate times and in an appropriate way, andaim for broad communication with society.
3) The Company will continue to not have any relationships with anti-social forces that have a negative
impact on the order and safety of civil society.
4) The Company will recognize the importance of environmental issues and cooperate with environmental
protection activities.
5) While providing services that are safe, high quality, and socially effective, the Company will work toward
societal contribution activities as a “good corporate citizen,” placing harmony with regional societies andinternational society at the forefront.
Under this Code of Conduct, the Company has formulated “Basic Policy Regarding Implementation ofInternal Control Systems” as described below, in order to ensure the appropriate execution of duties byexecutives and employees and appropriateness of corporate operations.
(1) System to ensure that the Directors execute their duties in compliance with laws and regulations and the
Articles of Incorporation
Important decision-making shall be deliberated upon and resolved at a meeting of the Board of
Directors that is held once per month in principle in accordance with the Regulations on the Board of
Directors, which clarifies agenda standards. Regarding execution of duties, responsibilities for Directors
shall be defined, and each Director shall execute duties concerning their responsibilities, withaccountability pursuant to laws and regulations and the Articles of Incorporation.
Corporate Auditors shall inspect important decision-making documents, attend meetings of theBoard of Directors and General Managers’ meetings to ascertain the status of important
decision-making and the execution of duties, and shall provide opinions.
(2) System to ensure that the employees execute their duties in compliance with laws and regulations andthe Articles of Incorporation
While ensuring thorough recognition of the Company’s “Code of Conduct” and internal regulations,the Internal Audit Department shall audit compliance with laws and regulations and the status of theexecution of duties based on the annual audit plan, report the results to the responsible Executive
Directors, and the division responsible for compliance shall evaluate the status of improvement of theaudit results.
In order to prevent actions that may infringe upon laws and regulations and the Articles ofIncorporation, an Internal Reporting Hotline (Helpline) shall be established.
Furthermore, through establishment of the Internal Control Committee and the CSR and Compliance
Committee, the implementation status of internal control functions and the compliance conditions shallbe evaluated, aiming to enhance the internal controls and CSR compliance.
(3) System for storage and management of information related to the execution of duties of the Directors
Minutes for meetings of the Board of Directors and important documents, etc. regarding theexecution of duties by Directors shall be appropriately stored and managed in accordance with laws andregulations and internal regulations.
(4) Regulations or any other systems for management of risk of loss
While aiming for thorough compliance with the Basic Risk Management Manual, etc., the Risk
Management Committee shall be established, working toward advance prevention of business risk andrisks related to finance and legal matters, alongside with strengthening measures against natural
disasters. Additionally, if risks arise, “Countermeasure Headquarters” shall be established, andcompanywide support and countermeasures shall be thoroughly implemented, aiming for minimizationof losses and early restoration of normal operations.
15

(5) System to ensure that the execution of duties of the Directors is efficient
Directors shall strictly maintain the efficiency and soundness of management while executing duties
related to their responsibilities according to the management plan.
In addition all Executive Directors shall deliberate regarding the execution of important duties basedon adequate documentation at Executive Committee held about once per week, while making resolutions
or reporting on execution status at meetings of the Board of Directors.
(6) System to ensure proper business execution within the Company group consisting of the Company andits subsidiaries
・ Executives shall be dispatched from the Company to subsidiaries. In addition to implementation of
Codes of Conduct suited for the businesses of subsidiaries, they oversee the duties of Directors ofsubsidiaries to be executed efficiently in accordance with the management plan.
・ The execution of important duties at subsidiaries shall be deliberated in advance with the Company inaccordance with the Regulations on Affiliate and Subsidiary Administration, and Executive Directors
in charge shall receive reports regarding the status of the execution of duties at subsidiaries andfinancial conditions, etc. from the subsidiaries periodically or as needed.
・ A Group Management Meeting, comprised of the Company and significant subsidiaries, shall be held
about twice per year, ensuring the appropriateness of operations of the overall Group.
・ The Internal Audit Department shall audit compliance with laws and regulations and the status of theexecution of duties at subsidiaries. Executive Directors in charge shall receive the results, cooperatewith Corporate Auditors and Internal Audit Department of the Company and Corporate Auditors of
the subsidiaries, and express their opinions regarding the optimization of operations of the overall
Group as necessary.
・ To prevent actions that may infringe upon laws and regulations and the Articles of Incorporation,
subsidiaries shall establish a common Internal Reporting Hotline (Helpline) jointly with the Company.
・ Regarding risk of losses at subsidiaries, in addition to management according to the Basic Risk
Management Manual, etc., subsidiaries shall establish risk management structures according to theirbusiness types.
・ Appropriate structures for internal controls shall be implemented and operated in order to secure thereliability of financial reporting.
(7) Employees to assist the duties of Corporate Auditors
The Corporate Auditors’ Chamber shall be established as a department to assist the duties ofCorporate Auditors, and dedicated personnel shall be assigned.
(8) Independence of employees to assist the duties of Corporate Auditors from Directors and mattersconcerning effectiveness of instructions toward said employees
By the nature of their post, personnel dedicated to the Corporate Auditors’ Chamber shall work
directly for Corporate Auditors, and deliberation shall be made with the Board of Corporate Auditors inadvance regarding the selection of such personnel, etc.
(9) System for Directors and employees and executives and employees of subsidiaries (including parties
receiving reports from these persons) to report to Corporate Auditors and other systems for reporting toCorporate Auditors
Directors and employees as well as executives and employees of subsidiaries (including parties
receiving reports from these persons) shall report periodically to Corporate Auditors regarding thestatus of the execution of duties and financial conditions, etc., and the Internal Audit Department shallreport the results of internal audits to Corporate Auditors.
Additionally, Directors and employees as well as executives and employees of subsidiaries (including
parties receiving reports from these persons) shall report as required to Corporate Auditors regarding
matters that will have a significant effect on management.
(10) System to ensure that persons reporting to Corporate Auditors do not receive unfavorable treatment
with said report as rationale
Any unfavorable treatment shall not be incurred due to reporting to Corporate Auditors includinginternal reporting.
(11) Policies for processing expenses or liabilities incurred regarding the execution of duties by Corporate
Auditors
Expenses or liabilities incurred regarding the execution of duties by Corporate Auditors shall be
16

processed appropriately in accordance with laws and regulations.
(12) Other systems to ensure the effectiveness of audits by Corporate Auditors
Corporate Auditors shall receive periodic reports from the Accounting Auditor regarding the statusof audits, and shall conduct effective audits through internal audits by the Internal Audit Department.
During audits, Directors and employees shall cooperate with Corporate Auditors to provide required
information at the appropriate time.
2.

Summary of the operational status of the system in 1. above
Based on the above “Basic Policy Regarding Implementation of Internal Control Systems,” the Company
has established and operated the internal control systems for the Company and subsidiaries.
A summary of the operational status of internal control systems for the fiscal year under review is asfollows.
(1) Status of the execution of duties by Directors and employees
・ Meetings of the Board of Directors were held 12 times, and the Board of Directors deliberated
important matters and made resolutions, and Directors in charge provided reports on the status ofexecution of important duties.
・ Executive Committee, comprised of all Executive Directors (Chairman of the Board, President, andManaging Directors) chaired by President, was held about once per week, and deliberated on
important matters regarding management.
・ In light of deliberations at Executive Committee, each Executive Director executed duties responsibly,
including measures based on the Medium-term Management Plan [2016-2018], according to thedivision of duties.
・ Aside from General Managers of Branches, the General Managers’ Meetings also comprised of
Directors, Corporate Auditors and the General Managers of the Headquarters Department were held
about once per month for a total of 11 times, and the status of the execution of duties were reported
and confirmed.
・ The Internal Control Committee, CSR and Compliance Committee, and Risk Management Committee
were each held once, and the status of execution of duties companywide was evaluated from theindependent viewpoints of each committee.
・ To ensure thorough dissemination of the Code of Conduct and internal regulations of the Company,
internal training has been conducted, and the status of compliance among executives and employees
has been confirmed through surveys, etc.
・ Minutes for meetings of the Board of Directors and important documents, etc. regarding the executionof duties by Directors have been managed by each responsible department according to the number ofyears required as defined by laws and regulations and internal regulations.
(2) Status of the Corporate Group, composed of the Company and subsidiaries
・ To manage risk of losses arising at the Group, the Company has prepared a “Basic Risk Management
Manual,” and worked to disseminate it.
・ Executives and employees of the Company are dispatched to subsidiaries, execute duties in thesubsidiaries and manage them by providing oversight and supervision.
・ A department to supervise subsidiaries were established, and the department discusses the executionof important duties with subsidiaries, receives periodic reports from subsidiaries regarding financial
conditions, etc., and reports to Executive Directors in charge and Corporate Auditors. Additionally, theGroup Management Meeting, comprised of the Company and significant subsidiaries, was held twice,and business results and issues, etc. were reported and confirmed, including the progress status of
measures based on the Medium-term Management Plan [2016 – 2018].
・ Concerning internal controls regarding financial reporting, effectiveness is evaluated based on the“Internal Control Evaluation Policy Book,” which defines the Group’s systems regarding operationand evaluation, and basic policies such as processes and methods.
(3) Status of Corporate Auditors, internal audits, and internal reporting・ Aside from exchanging information with the Representative Director through periodic meetings, etc.,
Corporate Auditors attended important meetings such as meetings of the Board of Directors andGeneral Managers’ Meetings. In addition to the examination of important documents, etc. regarding
the execution of duties by Directors such as decision-making documents, Corporate Auditors haveinspected the Company’s audit and subsidiaries, etc. based on the annual audit plan. Additionally,meetings of the Board of Corporate Auditors were held 16 times, and information on the status of the17Company and audit results, etc. have been shared.
・ During the formulation and implementation, etc. of their respective annual audit plans, Corporate
Auditors, the Internal Audit Department, Accounting Auditor and Corporate Auditors of subsidiaries
have conducted periodic meetings and exchanged information as needed, executing duties effectively
and efficiently.
・ To support the execution of duties of Corporate Auditors, a Corporate Auditors’ Chamber (onededicated employee) was established at the headquarters. The dedicated staff member executed duties
under the direction of Corporate Auditors, and matters concerning related personnel, etc. weredeliberated with the Board of Corporate Auditors in advance.
・ Expenses or liabilities that arose during the course of the execution of duties of Corporate Auditors
were appropriately processed in accordance with laws and regulations upon request from Corporate
Auditors.
・ Aside from establishing an Internal Audit Division (six dedicated employees) at the headquarters as
the Internal Audit Department, audit support employees (two persons) were assigned, and auditors(one each) and audit support employees (two each) were assigned at each branch. Audits wereconducted at the Company and Group companies based on the annual audit plan. Audit results werereported to Executive Directors in charge and Corporate Auditors, and the division responsible forcompliance evaluated the status of improvement on a quarterly basis.
・ Including the Corporate Auditors’ Chamber, multiple common Internal Reporting Hotlines were
established in the Group, and internal regulations stipulated the prohibition of unfavorable treatment
to the person who made an internal report.
3.

Basic policy regarding the Company’s control
The Group’s primary businesses are the Logistics Business with warehousing & distribution business at
its core, and the Real Estate Business, which focuses on the leasing of buildings.
Regarding the Logistics Business, the Group aims to organically and comprehensively operate each of theland transportation, international transportation and harbor transportation businesses centered on thewarehousing & distribution business by using information technologies. In the Real Estate Business, theGroup aims to expand the leasing business primarily in office buildings and commercial facilities byeffectively using the Group’s proprietary lands. Through fair operations of these businesses, the Group aims
to ensure appropriate profits and stable growth, and provide returns to shareholders and employees, making
contribution to realizing a prosperous society.
Due to the nature of the both businesses that needs land, building and facilities, etc. in favorable locations,both businesses require significant investment; therefore, the Company invest its management resources
including funds in a continuous and planned manner from a long-term standpoint with the aim of expanding
and developing businesses.

Although the Company does not unconditionally deny all intension of large-scale acquisition of theCompany’s shares, the Company believes that purchases in conflict with the above that damage corporate
value or common interests of shareholders are inappropriate.
Currently, the Company has not recognized any parties that are attempting large-scale acquisitions of theCompany’s share. However, the Company constantly monitors the trading status of the Company’s shares,
and in the event that a party attempting a large-scale acquisition of the Company’s shares in conflict withthese views appears, and if the purchase will not contribute to the Company’s corporate value and common
interests of shareholders, appropriate countermeasures will be considered, and the Company will prepare asystem for the swift implementation of the countermeasures.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Unless otherwise stated, the content of the above report adheres to the following.
1. Monetary amounts and share numbers are rounded down.
2. Ratios are rounded to the first decimal place.
3. If the number of shares or ratio is zero, it is presented as “-.”18Consolidated Balance Sheet(As of March 31, 2017)
Description

Amount(Assets)
Current assets

Description(Millions of yen)Amount(Liabilities)
89,167

Current liabilities

Cash and deposits

37,841

Notes and accounts receivable

33,588

Real estate held for sale

9,846

Notes and accounts payable
Short-term bank loans and current
maturities of long-term debt
Income taxes payable

Deferred income taxes

1,638

Provision for directors’ bonuses

Other

6,336

Other

Allowance for doubtful accounts(83)

59,146
21,75020,5462,676
50
14,123Long-term liabilities

99,337

Bonds payable

27,000Non-current assets

346,187

Long-term loans payable

18,053

Property and equipment

207,327

Deposits on long-term leases

21,142

Buildings and structures

108,550

20,424

Machinery and equipment

4,049

Land

86,905

Deferred income taxes
Provision for directors’ retirement
benefits
Net defined benefit liability

Construction in progress

1,534

Other

Other

6,287

Total liabilities

Intangible assets

15,882(Net assets)

Leasehold right

7,722

Shareholders’ equity

221,890

Goodwill

1,236

Common stock

22,393

Other

6,923

Capital surplus

19,566

Investments and other assets

122,977

Retained earnings

180,762

Investments in securities

114,545

Long-term loans receivable

527

Deferred income taxes

2,359

Other

5,708

Allowance for doubtful accounts(22)

Allowance for investment loss

(140)

Total assets

Treasury shares
Accumulated other comprehensive
incomeNet unrealized holding gains on
securities
Foreign currency translation
adjustments
Remeasurements of defined benefit
plans
Non-controlling interests

435,354

195
12,208
312
158,484(832)
52,332
51,422
975
(64)
2,646

Total net assets

276,870

Total liabilities and net assets

435,354(Figures are rounded down to the nearest million yen.)19

Consolidated Statement of Income(April 1, 2016 - March 31, 2017)(Millions of yen)
Description

Breakdown

Revenue
Warehousing fee income
Stevedoring income
Land transportation income
Harbor stevedoring income
International transportation income
Rent of real estate for investment
Other
Cost of services
Operational and transportation consignment costs
Personnel expenses
Facility rental expenses
Depreciation and amortization
Other
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividend income
Equity in earnings of unconsolidated subsidiaries andaffiliates
Foreign exchange gains
Other
Non-operating expenses
Interest expense
Other
Ordinary income
Extraordinary income
Gain on disposal of non-current assets
Gain on sale of marketable securities andinvestments in securities
Indemnity income of exiting facilities for lease
Compensation income
Extraordinary losses
Loss on disposal of non-current assets
Impairment loss
Provision of allowance for investment loss

Amount23,74916,79745,731
17,83444,02632,02528,554

208,718

83,84035,7909,075
12,56544,301

185,573
23,144
10,396
12,748

2,272
525
825
493
635
173

4,116

808
16,056

39
36

Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

210
353

639

678
193
27

900
15,796

4,543
488

5,032
10,763
97
10,665(Figures are rounded down to the nearest million yen.)
20

Consolidated Statement of Changes in Net Assets(April 1, 2016 - March 31, 2017)(Millions of yen)
Shareholders’ equity

Balance as of April 1, 2016

Common stock

Capital surplus

22,393

19,618Retained earnings Treasury shares
172,200

Total
shareholders’equity(807)

213,405

Changes of items during period
Cash dividends(2,103)(2,103)

Profit attributable to owners ofparent10,665

10,665Purchase of treasury shares
Disposal of treasury shares

0Change in treasury shares of parent
arising from transactions with
non-controlling shareholders
Changes other than to shareholders’equity, net

(25)

0

1

(51)

Total changes of items during period
Balance as of March 31, 2017

(25)

(51)

-

(51)

8,562

(24)

8,485

22,393

19,566

180,762(832)

221,890

Accumulated other comprehensive income
Net unrealized Foreign currency Remeasurements
translation
holding gains onof definedadjustments
securities
benefit plan

Balance as of April 1, 2016

40,282

1,703

(449)

Total accumulated Non-controlling
otherinterests
comprehensive
income41,535

2,583

Total
net assets

257,524

Changes of items during period
Cash dividends(2,103)

Profit attributable to owners ofparent10,665Purchase of treasury shares(25)

Disposal of treasury shares

1

Change in treasury shares of parent
arising from transactions with
non-controlling shareholders
Changes other than to shareholders’equity, net(51)
11,140(727)

385

10,79762

10,860Total changes of items during period

11,140(727)

385

10,79762

19,346

Balance as of March 31, 2017

51,422975(64)

52,332

2,646

276,870(Figures are rounded down to the nearest million yen.)21

Notes to the Consolidated Financial Statements
Notes to the Basis for Preparation of Consolidated Financial Statements
1. Scope of consolidation(1) Consolidated subsidiaries
Number of consolidated subsidiaries
52
Names of principal subsidiaries
Fuji Logistics Co., Ltd., Ryoso Transportation Co., Ltd., Dia Buil-Tech, Co., Ltd., Shinryo Koun Co., Ltd.,
Mitsubishi Logistics China Co., Ltd., P.T. Mitsubishi Logistics Indonesia, Mitsubishi Logistics America
Corporation and Mitsubishi Logistics Europe B.V.
(2) Non-consolidated subsidiaries
Names of principal non-consolidated subsidiary
Dia Logistics (M) Sdn. Bhd.
Non-consolidated subsidiaries are respectively small in scale, and the totals of total assets, revenue, profit
attributable to owners of parent (proportional amount of equity), and retained earnings (proportionalamount of equity), etc., each do not have a significant effect on the consolidated financial statements, thus
these subsidiaries are excluded from the scope of consolidation.
2. Application of the equity method(1) Non-consolidated subsidiaries and affiliates accounted for the equity method
There are no non-consolidated subsidiaries accounted for the equity method.
Number of affiliates subject to the equity method
3Name of principal affiliate
Kusatsu Soko Co., Ltd.
(2) Non-consolidated subsidiaries and affiliates not subject to the equity method
Name of principal non-consolidated subsidiary
Dia Logistics (M) Sdn. Bhd.
Name of principal affiliate
Nakatani Transportation Co., Ltd.
As non-consolidated subsidiaries and affiliates not subject to the equity method each of these companies has
only an immaterial effect on profit attributable to owners of parent and retained earnings, etc. and isinsignificant overall, these are excluded from application of the equity method.
3. Matters concerning the fiscal year, etc., of consolidated subsidiaries
All consolidated subsidiaries excluding 17 overseas subsidiaries such as Mitsubishi Logistics America
Corporation end their fiscal years on the same day as the Company.
The last day of the fiscal year for oversea subsidiaries such as Mitsubishi Logistics America Corporation is
December 31. The financial statements as of December 31 are used in the consolidated financial statements, andif any material transactions incur during the period from December 31 to March 31, necessary adjustments are
made on the consolidated financial statements.
4. Matters concerning accounting procedures(1) Standards and methods for valuation of important assets
A. Securities
Available-for-sale securities
Securities with market quotations
Stated at market based on the market price, etc. on the balance sheet date.
(Valuation difference is transferred directly to net assets. The cost of sales is calculated using themoving average method.)
Securities without market quotations
Stated at cost using the moving-average method.
B. Derivatives
22

Stated using the market value method.
C. Inventories (real estate held for sale)
Mainly stated at cost using the specific identification method.
(calculated by writing them down based on decline in profitability.)(2) Depreciation and amortization method for important depreciable or amortizable assets
A. Property and equipment (excluding leased assets)
The declining-balance method is applied.
Warehouse facilities (actual buildings), commercial facilities for lease (actual buildings) and facilities
and structures attached to buildings acquired on or after April 1, 2016 are calculated using thestraight-line method.
Furthermore, useful lives are determined according to stipulations of the Corporation Tax Act, and lives
for commercial facilities for lease (actual buildings) are determined with a standard of 20 years, taking
into account the lease agreement period, etc.
B. Intangible assets (excluding leased assets)
The straight-line method is applied.
Computer software for internal use is amortized over the estimated internal useful life (5 to 10 years)
using the straight-line method.
C. Leased assets(Leased assets relating to finance lease transactions without the transfer of ownership)
Leased assets are depreciated using the straight-line method with no residual value over the useful lifethat is the lease term of the leased assets.
(3) Important standards of accounting for reserves
A.

Allowance for doubtful accounts
To provide for losses resulting from unrecoverable claims such as accounts receivable and loans,allowance for doubtful accounts is recorded based on the historical write-off rate for ordinary receivables,and based on recoverability assessed individually for receivables such as doubtful accounts.

B.

Allowance for investment loss
To provide for losses resulting from a decline in the substantial price of stock and investment withoutmarket value, allowance is recorded taking into account the possibility of recovery if total net assets of
the issuing company fall below the book value.

C.

Provision for directors’ bonuses
To provide for bonuses to Directors, of estimated payment amount, amounts to be borne during the fiscal
year under review are recorded.

D.

Provision for directors’ retirement benefits
To provide for payments of retirement benefits for executives at certain consolidated subsidiaries,
amounts to be paid at the end of the fiscal year under review are recorded, based on predefined corporate
standards.

(4) Accounting treatment of retirement benefits
A. Method of attributing the estimated benefit obligation to periods
Upon calculating the retirement benefit obligation, the estimated benefit obligation is attributed to theperiod up until the fiscal year under review on a benefit formula basis.
B. Amortization method of actuarial calculation differences and prior service costs
Actuarial calculation differences are amortized using the straight-line method over a certain period (5 to16 years) within the average remaining years of service of employees, beginning from the fiscal year
following the incurred year. Prior service costs are recognized using the straight-line method over acertain period (15 years) within the average remaining years of service of employees, beginning from theincurred year.
23

(5) Amortization method and amortization period of goodwill
Goodwill is amortized over 5 to 10 years on a straight-line basis. Any immaterial amounts are fullyrecognized as expenses as incurred.
(6) Accounting treatment of consumption taxes, etc.
For accounting treatment of consumption tax and local consumption tax, the tax exclusion method is applied.
Changes in accounting procedures(Application of Practical Solution on Change in Depreciation Method due to Tax Reform 2016)
In line with the revisions to the Corporation Tax Act of Japan, the Company and domestic consolidated
subsidiaries applied the “Practical Solution on Change in Depreciation Method due to Tax Reform 2016” (PITF
No. 32, June 17, 2016) from the fiscal year under review. Accordingly, the depreciation method for facilities
attached to buildings and structures acquired on or after April 1, 2016 was changed from the declining-balancemethod to the straight-line method.
As a result, operating income, ordinary income and profit before income taxes for the fiscal year under review
each increased by 70 million yen.
Additional Information(Application of Revised Implementation Guidance on Recoverability of Deferred Tax Assets)
The Company and its consolidated subsidiaries applied the “Revised Implementation Guidance on
Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016) from the fiscal year underreview.
Notes to Consolidated Balance Sheet
1. Accumulated depreciation of property and equipment

296,431 million yen

2. Accumulated deferred tax reserves for non-current assets

3,378 million yen

3. Collateral assets
Assets pledged as collateral
Buildings and structures

108 million yen

Land1,085 million yen

Obligations related to the above
Short-term bank loans

300 million yen“Other” of current liabilities

256 million yen

Long-term loans payable

6,638 million yen

Deposits on long-term leases

1,000 million yen

4. Guarantee liability
Liability guarantees for borrowings of other companies

24

1,272 million yen

Notes to Consolidated Statements of Income
Impairment loss
The Company recognized impairment loss in the following asset group for the fiscal year under review:
Location
Use
Type
Amount (million yen)
Rent of real estate
Building and others
193
Osaka City, Osaka
facilities
In calculating impairment loss, assets are grouped by the lowest level that generates a cash flow independent
from other assets or asset groups.
The above asset groups have been recognized to have reduced profitability by operating activities, and as
short-term recovery is not expected, book values for assets related to said asset groups have been reduced to therecoverable amounts, and the reduction amount of 193 million yen (193 million yen in buildings) has beenrecorded as impairment loss in extraordinary losses.
The recoverable amounts are measured based on net sale prices derived from on real estate appraisal evaluation
amounts.
Notes to Consolidated Statement of Changes in Net Assets
1. Type and number of outstanding shares
Total number of outstanding shares as of March 31, 2107: Common stock

175,921,478 shares

2. Dividends(1) Dividend amountResolution
General Meeting of
Shareholders on
June 29, 2016
Meeting of theBoard of Directors
on October 31,
2016

Type ofstock

Total dividends(million yen)

Dividend pershare (yen)Record date

Effective dateCommon
stock

1,051

6

March 31,2016

June 30, 2016

Common
stock

1,051

6

September 30,
2016

December 1,
2016(2) Dividends whose record date is during this fiscal year, but whose effective date is after the end of this fiscal
year
The following items are proposed at the General Meeting of Shareholders to be held on June 29, 2017.
A. Total dividends

1,402 million yen

B. Source of dividends

Retained earnings

C. Dividend per share

8 yen

D. Record date

March 31, 2017

E. Effective dateJune 30, 201725

Notes to Financial Instruments
1. Status of Financial Instruments
The Group raises necessary funds mainly by bank loans or issuance of bonds. Temporary cash surplus, if any,
are invested in highly secured deposits, public bonds and corporate bonds, etc.
Notes and accounts receivable are exposed to credit risk of customers. In order to reduce such credit risk, theGroup controls on due date and balance for each customer in accordance with internal customer credit
management rules.
Investments in securities are mainly stocks issued by companies with which the Group has business relations.
The Group ascertains the fair values of such stocks at regular intervals.
Short-term loans are used mainly for operating capital, while long-term loans payable are used mainly forcapital expenditure. Interest rate swap contracts are used as a hedging instrument for long-term loans payable
with floating interest rates in order to avoid interest rate fluctuation risk. Derivatives are used based on actual
demand only.
2. Current Value, etc. of Financial Instruments
The amounts posted on the consolidated balance sheet, the market values, and the differences thereof as ofMarch 31, 2017 are as follows. Items whose fair values are extremely difficult to measure are not included in thefollowing table (please see (Note 2)).
(Millions of yen)
Consolidated balanceMarket value
Difference
sheet amount(1) Cash and deposits
37,84137,841(2) Notes and accounts receivable
33,58833,588(3) Investments in securities
104,861
104,861
available for-sale securities
Total assets
176,291
176,291(1) Notes and accounts payable
21,75021,750(2) Short-term bank loans
10,656
10,656(3) Bonds payable
27,00027,527527(4) Long-term loans payable (*)
27,94428,082
137(5) Deposits on long-term leases
1,165
1,161
(3)
(6) Derivatives
Total liabilities
88,51689,177661(*) Including current maturities of long-term debt.

(Note 1) Calculation method of the market value of financial instruments and securities & derivative transactions
Assets(1) Cash and deposits, (2) Notes and accounts receivable:
Relevant book values are used because the settlement term of the above items is short and their fair values
approximate their book values.
(3) Available for-sale securities in investments in securities:
The fair values of stocks are determined using the quoted price at the stock exchange.
Liabilities(1) Notes and accounts payable, (2) Short-term bank loans
Relevant book values are used because the settlement term of the above items is short and their fair values
approximate their book values.
(3) Bonds payable
The fair values of bonds issued by the Company are calculated using the market price.
(4) Long-term loans payable
Long-term loans payable with floating interest rates require that the interest rates be amended at certain periods of26

time. Therefore, relevant book values are used because their fair values approximate their book values. Long-termloans payable with fixed interest rates are calculated using the present value of the amount of principal and interest
discounted using the current borrowing rate for similar loans of comparable maturity. Certain long-term loans
payable with floating interest rates are subject to special treatment of interest rate swaps (see (6) below). Therefore,
the fair values of such long-term loans payable are calculated by discounting the total amount of principal andinterest that have been recorded together with said interest rate swap by an interest rate that would reasonably be
estimated to apply to a similar loan.
(5) Deposits on long-term leases
Deposits on long-term leases are calculated by the present value of future cash flows discounted using a risk-freerate.
(6) Derivatives:
As those resulting from special treatment of interest rate swaps are processed in unity with long-term loans payable
to which the hedge applies, these are recorded by including their values in the market value of said long-term loans
payable (see (4) above).
(Note 2) Unlisted stocks and others (consolidated balance sheet amount of 9,683 million yen) are not included in “(3)Available for-sale securities in investment in securities,” because the identification of their market values isdeemed extremely difficult due to the absence of market values and inability to estimate future cash flows. Of
deposits on long-term leases, those with future cash flows that cannot be estimated and with fair values which
are extremely difficult to measure (consolidated balance sheet amount of 19,977 million yen) are not includedin “(5) Deposits on long-term leases.”

Notes to Real Estates for Rent
The Company and some of its subsidiaries have some office buildings for rent (including land) in Tokyo and otherregions.
(Millions of yen)Amount on the consolidated balance sheet
Fair value
95,598327,638(Note 1) The amount on the consolidated balance sheet is the amount obtained by deducting accumulated depreciation fromacquisition cost.
(Note 2) Fair value as of March 31, 2017 was the amount mainly based on appraisal by an external real estate appraiser.

Notes to Per Share Information
1. Net assets per share
2. Basic earnings per share

1,565.27 yen
60.88 yen27

Notes to Significant Subsequent Events
At the meeting of the Board of Directors held on April 28, 2017, the Company resolved to revise the number ofshares constituting one unit and on partial amendments to the Articles of Incorporation and resolved to submit a
proposal for the reverse stock split at the 214th Annual General Meeting of Shareholders scheduled to be held on
June 29, 2017.
1. Reasons for reverse stock split
To enhance the convenience of investors, all stock exchanges in Japan have promoted efforts to standardize thetrading unit (the number of shares constituting one trading unit) of common stock to a unit of 100 shares by
October 1, 2018 in line with the “Action Plan for Consolidating Trading Units.”
Based on the above, the Company, as a company listed on the Tokyo Stock Exchange, proposes changing thenumber of shares constituting one trading unit for the Company’s stock from 1,000 shares to 100 shares. In
accordance with this, reverse stock split will be implemented to adjust the investment unit standard (the price per
trading unit) to an appropriate level.
2. Content of share consolidation(1) Type and ratio of stock to be consolidated
The consolidation will be made at a ratio of one share for every two shares of the Company’s common stock.
(2) Effective date of share consolidation
October 1, 2017
3. Effect on per share information
Per share information for the fiscal year under review, assuming that the reverse stock split was conducted at the
beginning of the fiscal year, is as follows.
(1) Net assets per share
3,130.53 yen(2) Basic earnings per share
121.75 yen

28

Non-consolidated Balance Sheet(As of March 31, 2017)
Description(Assets)
Current assets
Cash and deposits
Notes receivable
Accounts receivable
Real estate held for sale
Prepaid expenses
Short-term loans receivable
Deferred income taxes
Advances paid
Other
Allowance for doubtful accounts
Non-current assets
Property and equipment
Buildings
Structures
Machinery and equipment
Transportation equipment
Tools, furniture and fixtures
Land
Leased assets
Construction in progress
Intangible assets
Leasehold right
Software
Other
Investments and other assets
Investments in securities
Investments in capital ofsubsidiaries and affiliates
Long-term loans receivable
Guarantee deposits
Other
Allowance for doubtful accounts
Allowance for investment loss
Total assets(Millions of yen)AmountAmountDescription(Liabilities)
47,906
Current liabilities
44,596
13,860Accounts payable
13,230
Short-term bank loans and315
current maturities of
17,837long-term debt
19,352
Accounts payable - other
6,106
9,846
Income taxes payable
2,040
744
Advances received
2,594
292
Deposits received
2,220
Provision for directors’
1,003
50
bonuses
1,574
Other
514
925
Long-term liabilities
86,234(8)
Bonds payable
27,000Long-term loans payable
16,589335,824
Deposits on long-term leases
19,593
182,550
97,274
Deferred income taxes
18,622
1,939
Retirement benefits
4,429
2,717
Total liabilities
130,831
122(Net assets)
1,662
Shareholders’ equity
202,405
73,847
Common stock
22,3933,490
Capital surplus
19,387
1,496
Legal capital surplus
19,383
Other capital surplus
412,6497,673
Retained earnings
161,419
4,693
Legal retained earnings
3,121
281
Other retained earnings
158,298
Reserve for private
7,328
140,624insurance
103,733
Reserve for reduction entry
15,708Reserve for special
27,527
485
depreciation
6,324
General reserve
123,740
Retained earnings brought
3,792
11,036
forward373
Treasury shares(795)
Valuation and translation(15)
50,494
adjustments
Net unrealized holding gains(1,111)50,494on securities
Total net assets
252,899383,730 Total liabilities and net assets
383,730(Figures are rounded down to the nearest million yen.)29

Non-consolidated Statement of Income(April 1, 2016 - March 31, 2017)(Millions of yen)
Description

BreakdownAmountRevenue
Warehousing fee income

17,391

Stevedoring income

9,826Land transportation income

24,020

Harbor stevedoring income

16,163

International transportation income

28,053

Rent of real estate for investment

29,367

Other

22,072

146,896

Cost of services
Operational and transportation consignment costs

65,828Personnel expenses

11,998

Facility rental expenses

5,584

Depreciation and amortization

10,630Other

37,106Gross profit

131,147
15,748Selling, general and administrative expenses

5,464

Operating income

10,284Non-operating income
Interest and dividend income

3,020

Other

384

3,404

Non-operating expenses
Interest expense

558

Other

56

Ordinary income

615
13,073Extraordinary income
Gain on sale of marketable securities andinvestments in securities
Indemnity income of exiting facilities for lease36
174

Compensation income

353

564

Extraordinary losses
Loss on disposal of non-current assets

596

Impairment loss

193

Provision of allowance for investment loss

79

Income before income taxes

869
12,768

Income taxes - current

3,461

Income taxes - deferred232

Net income

3,693
9,074

(Figures are rounded down to the nearest million yen.)30

Non-consolidated Statement of Changes in Net Assets(April 1, 2016 - March 31, 2017)(Millions of yen)

Shareholders’ equity
Capital surplus
Commonstock

Balance as of April 1, 2016
Changes of items during
periodCash dividends
Net income
Provision of reserve forprivate insurance
Reversal of reserve for
reduction entry
Provision of reserve for
reduction entry
Reversal of reserve for
special depreciation
Provision of reserve for
special depreciation
Provision of generalreserve
Purchase of treasury
shares
Disposal of treasury
sharesChanges other than toshareholders’ equity,net
Total changes of items
during the period
Balance as of March 31,
201722,393

Legal capitalsurplus

Other capitalsurplus19,383

4

Legalretainedearnings
3,121

Retained earnings
Other retained earnings
Reserve
Reserve forReserve for
for
privatespecialreduction
insurance
depreciation
entry
7,128
15,731
622

200
(190)
167
(150)
13

0

-

-

0

-

200

(23)

(137)

22,393

19,383

4

3,121

7,328

15,708485(Figures are rounded down to the nearest million yen.)31

Valuation andtranslation
adjustments

Shareholders’ equity
Retained earnings
Other retained earnings
Retained
General reserve earnings brought
forwardBalance as of April 1, 2016

118,240

Total
shareholders'equityTreasuryshares

9,604

(771)

Net unrealized
holding gains
on securities

195,458

39,531Total
net assets

234,989

Changes of items during
periodCash dividends(2,103)(2,103)(2,103)

Net income

9,074

9,074

9,074

(200)

-

-

190

-

-

(167)

-

-

150

-

-

(13)

-

-

(5,500)

-

-

(25)

(25)

(25)

0

1

1

Provision of reserve forprivate insurance
Reversal of reserve for
reduction entry
Provision of reserve for
reduction entry
Reversal of reserve for
special depreciation
Provision of reserve for
special depreciation
Provision of generalreserve
Purchase of treasury
shares
Disposal of treasury
sharesChanges other than toshareholders’ equity,net
Total changes of items
during the period
Balance as of March 31,
2017

5,500

10,962

10,962

5,500

1,432

(24)

6,946

10,962

17,909123,740

11,036(795)

202,405

50,494

252,899(Figures are rounded down to the nearest million yen.)32

Notes to the Non-consolidated Financial Statements
Notes to Significant Accounting Policies
1. Standards and methods of valuation of securities(1) Stocks of subsidiaries and affiliates
Stated at cost using the moving-average method.
(2) Available-for-sale securities
Securities with market quotations
Stated at market based on the market price, etc. on the balance sheet date. (Valuation difference istransferred directly to net assets. The cost of sales is calculated using the moving average method.)
Securities without market quotations
Stated at cost using the moving-average method.
2. Standards and methods of valuation of derivatives
Stated using the market value method.
3. Standards and methods of valuation of inventories
Valuation for real estate held for sale is recorded using the cost accounting method (method to reduce bookvalues based on declines in profitability) on an individual basis.
4. Depreciation and amortization method for non-current assets(1) Property and equipment (excluding leased assets)
The declining-balance method is applied.
Warehouse facilities (actual buildings), commercial facilities for lease (actual buildings) and facilities andstructures attached to buildings acquired on or after April 1, 2016 are calculated using the straight-line
method.
Furthermore, useful lives are determined according to stipulations of the Corporation Tax Act, andcommercial facilities for lease (actual buildings) are determined with a standard of 20 years, withadjustments made for factors such as the lease agreement period, etc.
(2) Intangible assets (excluding leased assets)
The straight-line method is applied.
Computer software for internal use is amortized over the estimated internal useful life (5 to 10 years)
using the straight-line method.
(3) Leased assets
Leased assets relating to finance lease transactions without the transfer of ownership.
Leased assets are depreciated using the straight-line method with no residual value over the useful lifethat is the lease term of the leased assets.
5. Standards of accounting for reserves
Allowance for doubtful accounts
To provide for losses resulting from unrecoverable claims such as accounts receivable and loans,allowance for doubtful accounts is recorded based on the historical write-off rate for ordinary receivables,and based on recoverability assessed individually for receivables such as doubtful accounts.
Allowance for investment loss
To provide for losses resulting from a decline in the substantial price of stock and investment withoutmarket value, allowance is recorded taking into account the possibility of recovery if total net assets of
the issuing company fall below the book value.
Provision for directors’ bonuses
To provide for bonuses to Directors, of estimated payment amount, amounts to be borne during the fiscal
year under review are recorded.
Provision for retirement benefits
33

Provision for retirement benefits is provided based on the estimated benefit obligation and pension assets
as of March 31, 2017.
1) Method of attributing the estimated benefit obligation to periods
Upon calculating the retirement benefit obligation, the estimated benefit obligation is attributed to theperiod up until the fiscal year under review on a benefit formula basis.
2) Amortization method of actuarial calculation differences
Actuarial calculation differences are amortized using the straight-line method over a certain period (5years) within the average remaining years of service of employees, beginning from the fiscal year
following the incurred year.
6. Accounting treatment of consumption taxes, etc.
For accounting treatment of consumption tax and local consumption tax, the tax exclusion method is applied.
Changes in accounting procedures(Application of Practical Solution on Change in Depreciation Method due to Tax Reform 2016)
In line with the revisions to the Corporation Tax Act of Japan, the Company applied the “Practical Solution on
Change in Depreciation Method due to Tax Reform 2016” (PITF No. 32, June 17, 2016) from the fiscal year
under review. Accordingly, the depreciation method for facilities attached to buildings and structures acquiredon or after April 1, 2016 was changed from the declining-balance method to the straight-line method.
As a result, operating income, ordinary income, and profit before income taxes for the fiscal year under review
each increased by 63 million yen.
Additional Information(Application of Revised Implementation Guidance on Recoverability of Deferred Tax Assets)
The Company applied the “Revised Implementation Guidance on Recoverability of Deferred Tax Assets”(ASBJ Guidance No. 26, March 28, 2016) from the fiscal year under review.

34Notes to Non-Consolidated Balance Sheet
1. Monetary receivables from and payables to affiliates
1,137 million yen
Short-term monetary asset
Short-term monetary liability 4,778 million yen

Long-term monetary asset
Long-term monetaryliability

6,389 million yen
613 million yen

2. Accumulated depreciation of property and equipment

262,389 million yen

3. Accumulated deferred tax reserves for non-current assets

3,373 million yen

4. Collateral assets
Assets pledged as collateral
98 million yen
Buildings
Obligations related to the above
150 million yen
Short-term bank loans
6,638 million yen
Long-term loans payable
5. Guarantee liability

Land

794 million yen

Advances received
Long-term deposits received

256 million yen
1,000 million yen

Liability guarantees for borrowings of other companies

1,334 million yen

Notes to Non-consolidated Statement of Income
Transactions with affiliates
Operating transactions
Revenue
Transactions other than operating transactions

8,433 million yen
2,208 million yen

Cost45,260 million yen

Notes to Non-consolidated Statement of Changes in Net Assets
Number of treasury shares as of March 31, 2017
Common stock659,143 shares

Notes to Tax Effect Accounting
Major factors for deferred tax assets and liabilities[Deferred tax assets]
Enterprise taxes payable
Allowance for investment loss
Accrued bonuses
Provision for retirement benefits
Depreciation
Impairment loss
Other
Total deferred tax assets[Deferred tax liabilities]
Valuation difference on available-for-sale securities
Provision of reserve for reduction entry
Provision of reserve for special depreciation
Total deferred tax liabilities
Deferred tax liabilities, net

149 million yen
340 million yen
407 million yen
1,355 million yen
5,509 million yen
2,399 million yen
1,380 million yen
11,543 million yen(22,022) million yen(6,926) million yen(213) million yen(29,162) million yen(17,619) million yen

35

Notes to Related-party Transactions
Subsidiaries, etc.

(Millions of yen)

Percentage
Relationship
Name of company,
Summary ofTransaction
Balance atTypeownership of voting with related
Item
etc.
transactions
amountperiod end
rights held
parties
P.T. Mitsubishi
Long-term
99.9%
Funding
Subsidiary
Logistics
Lending of funds
5,500
loans
5,500
[-]
assistanceIndonesia
receivable(Note) Interest is determined in consideration of market interest rates.

Notes to Per Share Information
1. Net assets per share
2. Basic earnings per share

1,442.98 yen
51.77 yen

Notes to Significant Subsequent Events
At the meeting of the Board of Directors held on April 28, 2017, the Company resolved to revise the number ofshares constituting one unit and on partial amendments to the Articles of Incorporation and resolved to submit a
proposal for the reverse stock split at the 214th Annual General Meeting of Shareholders scheduled to be held on
June 29, 2017.
1. Reasons for reverse stock split
To enhance the convenience of investors, all stock exchanges in Japan have promoted efforts to standardize thetrading unit (the number of shares constituting one trading unit) of common stock to a unit of 100 shares by
October 1, 2018 in line with the “Action Plan for Consolidating Trading Units.”
Based on the above, the Company, as a company listed on the Tokyo Stock Exchange, proposes changing thenumber of shares constituting one trading unit for the Company’s stock from 1,000 shares to 100 shares. In
accordance with this, reverse stock split will be implemented to adjust the investment unit standard (the price per
trading unit) to an appropriate level.
2. Content of share consolidation(1) Type and ratio of stock to be consolidated
The consolidation will be made at a ratio of one share for every two shares of the Company’s common stock.
(2) Effective date of share consolidation
October 1, 2017
3. Effect on per share information
Per share information for the fiscal year under review, assuming that the reverse stock split was conducted at
the beginning of the fiscal year, is as follows.
(1) Net assets per share
2,885.95 yen(2) Basic earnings per share
103.55 yen

36Independent Auditor’s Report
April 28, 2017
The Board of Directors
Mitsubishi Logistics Corporation

KPMG AZSA LLC
Atsuki Kanezuka
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Yasuyuki Nagasaki
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Takahiro Akiyama
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the consolidated financial statements, comprising the consolidated balance sheet, the consolidated
statement of income, the consolidated statement of changes in net assets and the related notes of Mitsubishi
Logistics Corporation as at March 31, 2017 and for the year from April 1, 2016 to March 31, 2017 in accordancewith Article 444-4 of the Companies Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit as
independent auditor. We conducted our audit in accordance with auditing standards generally accepted in Japan.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on our judgement, including the assessment of
the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In
making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentationof the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances,while the objective of the financial statement audit is not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the37overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position and the results of operations of Mitsubishi Logistics Corporation and its consolidated subsidiaries
for the period, for which the consolidated financial statements were prepared, in accordance with accounting
principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to theprovisions of the Certified Public Accountants Law of Japan.

Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as
required by the Companies Act.

38

Independent Auditor’s Report
April 28, 2017
The Board of Directors
Mitsubishi Logistics Corporation

KPMG AZSA LLC
Atsuki Kanezuka
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Yasuyuki Nagasaki
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Takahiro Akiyama
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the financial statements, comprising the balance sheet, the statement of income, the statement ofchanges in net assets and the related notes, and the supplementary schedules of Mitsubishi Logistics Corporation as
at March 31, 2017 and for the year from April 1, 2016 to March 31, 2017 in accordance with Article 436-2-1 of theCompanies Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the
supplementary schedules in accordance with accounting principles generally accepted in Japan, and for suchinternal control as management determines is necessary to enable the preparation of financial statements and the
supplementary schedules that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementary schedules based on
our audit as independent auditor. We conducted our audit in accordance with auditing standards generally
accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and the supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements and the supplementary schedules. The procedures selected depend on our judgement,
including the assessment of the risks of material misstatement of the financial statements and the supplementaryschedules, whether due to fraud or error. In making those risk assessments, we consider internal control relevantto the entity’s preparation and fair presentation of the financial statements and the supplementary schedules in orderto design audit procedures that are appropriate in the circumstances, while the objective of the financial statement
audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
39

estimates made by management, as well as evaluating the overall presentation of the financial statements and the
supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the financial statements and the supplementary schedules referred to above present fairly, in allmaterial respects, the financial position and the results of operations of Mitsubishi Logistics Corporation for theperiod, for which the financial statements and the supplementary schedules were prepared, in accordance withaccounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to theprovisions of the Certified Public Accountants Law of Japan.

Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as
required by the Companies Act.

40

Board of Corporate Auditors’ Audit Report (duplicated copy)

Audit Report(English Translation)
Regarding the performance of duties by the Directors for the 214th fiscal year from April 1, 2016 to March 31,
2017, the Board of Corporate Auditors hereby submits its audit report, which has been prepared upon carefulconsideration based on the audit report prepared by each Corporate Auditor.
1. Summary of Auditing Methods by the Corporate Auditors and Board of Corporate Auditors(1) The Board of Corporate Auditors established auditing policies, allocation of duties, and other relevant
matters, and received reports from each Corporate Auditor regarding his or her audits and results thereof,
as well as received reports from the Directors, other relevant personnel and the Accounting Auditor
regarding performance of their duties, and sought explanations as necessary.
(2) Each Corporate Auditor complied with the auditing standards of the Corporate Auditors established by
the Board of Corporate Auditors, followed the auditing policies, allocation of duties, and other relevant
matters, communicated with Directors, the Internal Audit Department, other employees, and any otherrelevant personnel, and made efforts to prepare the environment for information collection and audit, as
well as conducted the audit through the methods described below.
1. We participated in meetings of the Board of Directors and other important meetings, received reports
from the Directors, employees and other relevant personnel regarding performance of their duties,
sought explanations as necessary, examined important authorized documents and associatedinformation, and studied the operations and financial positions at the headquarters and principal
business offices. With respect to subsidiaries, we communicated with, and collected information
from, Directors and Corporate Auditors of subsidiaries as well as received reports from subsidiaries
on their business as necessary.
2. In addition, with respect to the system for ensuring that the performance of duties by the Directors as
stated in the Business Report conforms to the related laws and regulations and the Articles ofIncorporation, and the contents of the resolutions of the Board of Directors regarding preparation ofother system to ensure the properness of operations of a group of enterprises consisting of a stockcompany and its subsidiaries as stipulated in Article 100, Paragraphs 1 and 3, of the Ordinance for
Enforcement of the Companies Act and such other system prepared based on such resolutions(internal controls system), we received regular reports from Directors, employees and other relevant
personnel regarding the development and the operation of the system, requested explanations asneeded and expressed opinions.
3. We examined the details of the basic policies pursuant to Article 118, Item 3 of the Ordinance for
Enforcement of the Companies Act set forth in the business report, based on the carefulconsideration that took place during meetings of the Board of Directors and others.
4. Furthermore, we monitored and verified whether the Accounting Auditor maintained its
independence and implemented appropriate audits, as well as received reports from the Accounting
Auditor regarding the performance of its duties and sought explanations as necessary. In addition, we
received notice from the Accounting Auditor that “the system for ensuring that duties are performed
properly” (matters set forth in each item of Article 131 of the Ordinance for Corporate Accounting)had been prepared in accordance with the Product Quality Management Standards Regarding Audits(issued by the Business Accounting Deliberation Council on October 28, 2005) and other relevant
standards, and sought explanations as necessary.
Based on the above methods, we examined the Business Report and the supplementary schedules thereof,
the non-consolidated financial statements (non-consolidated balance sheet, non-consolidated statement ofincome, non-consolidated statement of changes in net assets, and non-consolidated notes) and the
supplementary schedules thereof, as well as the consolidated financial statements (consolidated balance sheet,consolidated statement of income, consolidated statement of changes in net assets and consolidated notes)
related to the relevant fiscal year.

41

2. Results of Audit(1)

Results of Audit of Business Report and Other Relevant Documents

1. In our opinion, the business report and the supplementary schedules are in accordance with the related
laws and regulations, and the Articles of Incorporation, and fairly represent the Company’s condition.
2. We have found no evidence of wrongful action or material violation of related laws and regulations, norof any violation with respect to the Articles of Incorporation, related to performance of duties by the
Directors.
3. In our opinion, the contents of the resolutions of the Board of Directors related to the internal control
systems are fair and reasonable. In addition, we have found no matters on which to remark regarding thedescription in the Business Report and the performance of duties by the Directors related to such internal
control systems, as well as internal control over Financial Reporting.
4. We have found no matters to point out with respect to the basic policies regarding the Company’scontrol as described in the Business Report.
(2)

Results of Audit of Non-consolidated Financial Statements and Supplementary Schedules
In our opinion, the methods and results employed and rendered by Accounting Auditor KPMG AZSA
LLC are fair and reasonable.

(3)

Results of Audit of Consolidated Financial Statements
In our opinion, the methods and results employed and rendered by Accounting Auditor KPMG AZSA
LLC are fair and reasonable.

May 2, 2017
Board of Corporate Auditors, Mitsubishi Logistics Corporation
Standing Corporate Auditor
Standing Corporate Auditor(Outside Corporate Auditor)
Corporate Auditor(Outside Corporate Auditor)
Corporate Auditor(Outside Corporate Auditor)
Corporate Auditor

42

Tohru Watanabe
Yoshihito Yoshizawa
Yohnosuke Yamada
Kenji Sakurai
Hiroshi Imai

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal No. 1: Appropriation of Surplus
As to the appropriation of surplus, the Company adheres to a policy of maintaining stable dividend inconsideration of the earning level while paying attention to the systematic development of the logistics businesscentered on the warehousing & distribution business, the Company’s mainstay business, and of the real estatebusiness centered on building leases, as well as to strengthening of its financial structure in preparation forchanges in its business environment..
For the fiscal year ended March 31, 2017, we propose the year-end dividend of 6 yen per share, taking into
account such factors as the above basic policies and operating results for the year, and combined with acommemorative dividend of 2 yen per share to mark the 130th anniversary of the Company’s founding, a total of
8 yen per share. As a result, the annual dividend, including the interim dividend, will be 14 yen, an increase of 2
yen per share from the previous fiscal year.
1. Matters regarding year-end dividends(1) Type of dividend property
Cash(2) Matters concerning the allotment of dividend property and its total amount
8 yen per share of common stock of the Company
The total amount: 1,402,098,680 yen(3) Effective date of the dividend of surplus
June 30, 2017
2. Other matters regarding appropriation of surplus(1) Item of surplus increased and its amountReserve for private insurance:
200,000,000 yen
General reserve:
6,500,000,000 yen(2) Item of surplus decreased and its amount
Retained earnings brought forward: 6,700,000,000 yen

43Proposal No. 2: Reverse Stock Split
1. Reasons for reverse stock split
To enhance the convenience of investors, all stock exchanges in Japan have promoted efforts tostandardize the trading unit (the number of shares constituting one trading unit) of common stock to a unitof 100 shares by October 1, 2018 in line with the “Action Plan for Consolidating Trading Units.”
Based on the above, the Company, as a company listed on the Tokyo Stock Exchange, proposes changing
the number of shares constituting one trading unit for the Company’s stock from 1,000 shares to 100 shares.
In accordance with this, reverse stock split will be implemented to adjust the investment unit standard (theprice per trading unit) to an appropriate level.
2. Ratio of reverse stock split
The reverse stock split will be implemented at a ratio of one share for every two shares of stock recordedon the final shareholder registry on September 30, 2017.
Furthermore, in the event that a fraction of less than one share arises due to the reverse stock split, theCompany will dispose of the fractional shares collectively as prescribed in the Companies Act, anddistribute the money in exchange of the disposal according to the ratio of the fractional shares.
3. Effective date of the share consolidation
October 1, 2017
4. Total number of shares authorized to be issued as of the effective date
220,000,000 shares[Reference]In the case that this Proposal is approved as originally proposed, the Articles of Incorporation of theCompany will be amended on October 1, 2017 as follows.
(Underlines indicate amended sections.)
Current Articles of Incorporation
Amended Articles of Incorporation(Chapter II Shares)(Chapter II Shares)
Article 5 The total number of shares authorized to
Article 5 The total number of shares authorized to
be issued of the Company shall be
be issued of the Company shall be
440,000,000 shares.
220,000,000 shares.
Article 7 The number of shares constituting one
Article 7 The number of shares constituting one
trading unit of the Company shall be
trading unit of the Company shall be 100
shares.
1,000 shares.

44

Proposal No. 3: Election of Fourteen (14) Directors
The terms of office of all fourteen (14) Directors will expire at the conclusion of this year’s Annual General
Meeting of Shareholders. Accordingly, we nominate the following fourteen (14) candidates for Directors:
No.

Name
(Date of birth)

Past experience and significant concurrent positions
April 1973
June 2002
June 2004
June 2006

1

2

3

4

Number ofshares of theCompany held

Joined the Company
General Manager, Yokohama Branch
General Manager, Tokyo Branch
Tetsuro Okamoto
Director assisting the Managing Director (responsible for
64,000(August 2, 1950)
Warehousing & Distribution Business)
June 2007
Managing Director
June 2008
President
April 2013
Chairman of the Board (current position)[Reason for nomination as candidate for Director]
Mr. Tetsuro Okamoto had long served in the General Affairs division and Sales division in addition to his term of office as
General Manager of Yokohama Branch and Tokyo Branch. After his term of office as Director assisting the Managing
Director responsible for Warehousing & Distribution Business, and Managing Director, he had served as President andhad overseen overall business operation as a chief executive of the Company from 2008 to 2013, and is currently serving as
Chairman of the Board. He possesses a wealth of experience and professional knowledge for the Company’s business
operation, therefore, the Company nominated him as Director.
April 1977
Joined the Company
June 2008
General Manager, Personnel Division
Akio Matsui
June 2011
Director and General Manager, Personnel Division
32,570(June 20, 1954)
June 2012Managing Director; and General Manager, Personnel Division
April 2013
President (current position)[Reason for nomination as candidate for Director]
Mr. Akio Matsui had long served in the International Transportation Business division including overseas assignment inaddition to his term of office as General Manager of Personnel Division, etc. After his term of office as the Managing
Director responsible for General Affairs, Corporate Communications, Personnel, and Planning, he is currently serving as
President and oversees overall business operation as a chief executive of the Company. He possesses a wealth of experienceand professional knowledge for the Company’s business operation, therefore, the Company nominated him as Director.
April 1977
Joined the Company
General Manager, Kobe Branch
Takanori Miyazaki June 2010
24,000(December 27, 1953) June 2012
Director and General Manager, Kobe Branch
April 2014
Managing Director (current position)[Reason for nomination as candidate for Director]
Mr. Takanori Miyazaki had long served in the General Affairs division and Sales division in addition to his term of officeas General Manager of Kobe Branch, etc. He is currently serving as Managing Director responsible for Accounting &Financing, Information System, Technical, and Real Estate Business. He possesses a wealth of experience and professional
knowledge for the Company’s business operation, therefore, the Company nominated him as Director.
October 1977
Joined the Company
June 2011
General Manager, Harbor Transportation Business Division
Yoshiji Ohara
7,000
June 2014
Director and General Manager, Harbor Transportation Business(August 5, 1954)
Division
April 2016
Managing Director (current position)[Reason for nomination as candidate for Director]
Mr. Yoshiji Ohara had long served in the Harbor Transportation Business division in addition to his term of office as
General Manager of Harbor Transportation Business Division, etc. He is currently serving as Managing Director
responsible for Harbor Transportation Business. He possesses a wealth of experience and professional knowledge for theCompany’s business operation, therefore, the Company nominated him as Director.

45

No.

Name
(Date of birth)

Past experience and significant concurrent positions
April 1979
June 2010
June 2011
April 2015

5

6

7

8

Number ofshares of theCompany held

Joined the Company
General Manager, Fukuoka Branch
General Manager, Osaka Branch
Noboru Hiraoka
General Manager, Warehousing & Distribution Business
17,000(March 15, 1956)
Division
June 2015
Director and General Manager, Warehousing & Distribution
Business Division
April 2016
Managing Director (current position)[Reason for nomination as candidate for Director]
Mr. Noboru Hiraoka had long served in the International Transportation Business division including overseas assignment inaddition to his term of office as General Manager of Fukuoka Branch, General Manager of Osaka Branch and General
Manager of Warehousing & Distribution Business Division. He is currently serving as Managing Director responsible forInternational Transportation Business. He possesses a wealth of experience and professional knowledge for the Company’sbusiness operation, therefore, the Company nominated him as Director.
April 1981
Joined the Company
June 2009
General Manager, General Affairs Division and Corporate
Communications Chamber
Fumihiro Shinohara
10,000(August 29, 1957)
June 2015
Director and General Manager, General Affairs Division andCorporate Communications Chamber
April 2016
Managing Director (current position)[Reason for nomination as candidate for Director]
Mr. Fumihiro Shinohara had long served in the General Affairs division in addition to his term of office as General
Manager of General Affairs Division and Corporate Communications Chamber, etc. He is currently serving as Managing
Director responsible for General Affairs, Corporate Communications, Personnel, Planning, and Internal Audit. He
possesses a wealth of experience and professional knowledge for the Company’s business operation, therefore, theCompany nominated him as Director.
April 1982
Joined the Company
June 2012
General Manager, Warehousing & Distribution Business
Division
April 2015
Chairman of the Board of Mitsubishi Logistics China Co., Ltd.
Hitoshi Wakabayashi
10,000April 2016
General Manager, Warehousing & Distribution Business(January 22, 1960)
Division of the Company
June 2016
Director and General Manager, Warehousing & Distribution
Business Division
April 2017Managing Director (current position)[Reason for nomination as candidate for Director]
Mr. Hitoshi Wakabayashi had long served in the General Affairs division and the Warehousing & Distribution Businessdivision in addition to his term of office as General Manager of Warehousing & Distribution Business Division and an
officer in charge of an overseas subsidiary controlling the business in China, etc. He is currently serving as Managing
Director responsible for Warehousing & Distribution Business Division. He possesses a wealth of experience andprofessional knowledge for the Company’s business operation, therefore, the Company nominated him as Director.
April 1982
Joined the Company
June 2012
General Manager, International Business Coordination Chamber
Masao Fujikura
April 2015
General Manager, Osaka Branch
8,000(March 20, 1959)
June 2016
Director and General Manager, Osaka Branch
April 2017Managing Director; and General Manager, Osaka Branch(current position)[Reason for nomination as candidate for Director]
Mr. Masao Fujikura had long served in the Warehousing & Distribution Business division and the International
Transportation Business division in addition to his term of office as General Manager of International Business
Coordination Chamber, etc. He is currently serving as Managing Director and General Manager of Osaka Branch. He
possesses a wealth of experience and professional knowledge for the Company’s business operation, therefore, theCompany nominated him as Director.

46

No.

Name
(Date of birth)

Past experience and significant concurrent positions
March 1956
June 1992
April 1998
April 2004

9

10

11

Number ofshares of theCompany held

Joined Mitsubishi Corporation
President of Mitsubishi Corporation
Chairman of the Board of Mitsubishi Corporation
Member of the Board, Senior Corporate Advisor (Soudanyaku)
of Mitsubishi Corporation
June 2004
Senior Corporate Advisor (Soudanyaku) of Mitsubishi
Minoru Makihara
Corporation
40,000(January 12, 1930)
June 2010
Senior Corporate Advisor of Mitsubishi Corporation (current
position)
June 1993
Director of the Company (current position)[Significant concurrent positions]
Senior Corporate Advisor of Mitsubishi Corporation
Outside Director of Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
[Reason for nomination as candidate for Outside Director]
Mr. Minoru Makihara has long been engaged in corporate management of Mitsubishi Corporation. The Company
nominated him as a Director so that the Company’s management may benefit from the broad insight and invaluable advice
from him who represents the business community in Japan.
April 1958
Joined The Mitsubishi Bank, Ltd.
June 2000
President of The Bank of Tokyo-Mitsubishi, Ltd.
April 2001
President & CEO of Mitsubishi Tokyo Financial Group, Inc.
June 2004
Chairman of The Bank of Tokyo-Mitsubishi, Ltd.
Director of Mitsubishi Tokyo Financial Group, Inc.
October 2005
Director of Mitsubishi UFJ Financial Group, Inc.
January 2006
Chairman of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Shigemitsu Miki
0
June 2006
Retired from Director of Mitsubishi UFJ Financial Group, Inc.
(April 4, 1935)
April 2008
Senior Advisor (Soudanyaku) of The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
April 2010
Senior Advisor of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(current position)
June 2009
Director of the Company (current position)[Significant concurrent positions]
Senior Advisor of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
[Reason for nomination as candidate for Outside Director]
Mr. Shigemitsu Miki has long been engaged in the corporate management of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Company nominated him as Director so that the Company’s management may benefit from the broad insight andinvaluable advice from him who represents the business community in Japan.
April 1970
Joined Nippon Yusen Kabushiki Kaisha
April 2004
President and Corporate Officer of Nippon Yusen Kabushiki
KaishaApril 2006
President, President Corporate Officer of Nippon Yusen
Kabushiki Kaisha
April 2009
Chairman, Chairman Corporate Officer of Nippon Yusen
Kabushiki Kaisha
Koji Miyahara0
Director, Board Counselor of Nippon Yusen Kabushiki Kaisha(December 3, 1945) April 2015
June 2015
Board Counselor of Nippon Yusen Kabushiki Kaisha (current
position)
June 2014
Director of the Company (current position)[Significant concurrent positions]Board Counselor of Nippon Yusen Kabushiki Kaisha
Outside Director of Toho GAS Co., Ltd.
[Reason for nomination as candidate for Outside Director]
Mr. Koji Miyahara has long been engaged in the corporate management of Nippon Yusen Kabushiki Kaisha. The
Company nominated him as Director so that the Company’s management may benefit from the broad insight andinvaluable advice from him who represents the business community in Japan.

47

No.

Name
(Date of birth)13

14

Number ofshares of theCompany held

Joined the Company
General Manager, Accounting & Financing Division
10,005
Director and General Manager, Accounting & Financing
Division (current position)[Reason for nomination as candidate for Director]
Mr. Yasushi Saito had long served in the Accounting & Financing division and is currently serving as Director and General
Manager of Accounting & Financing Division. He possesses a wealth of experience and professional knowledge for theCompany’s business operation, therefore, the Company nominated him as Director.
April 1981
Joined the Company
June 2012
General Manager, International Transportation Business
Tomohiko Takami
Division
20,000(May 15, 1956)
June 2016
Director and General Manager, International Transportation
Business Division (current position)[Reason for nomination as candidate for Director]
Mr. Tomohiko Takami had long served in the Warehousing & Distribution Business division and the International
Transportation Business division. He is currently serving as Director and General Manager of International Transportation
Business Division. He possesses a wealth of experience and professional knowledge for the Company’s business operation,
therefore, the Company nominated him as Director.
April 1982
Joined the Company
Shinji Kimura
April 2014
General Manager, Personnel Division
8,000(July 18, 1958)
April 2016
General Manager, General Affairs Division, Corporate
New candidate
Communications Chamber and Personnel Division (current
position)[Reason for nomination as candidate for Director]
Mr. Shinji Kimura had long served in the management division such as planning, in addition to Harbor Transportation
Business Division. He is currently serving as General Manager of General Affairs Division, Corporate Communications
Chamber and Personnel Division. He possesses a wealth of experience and professional knowledge for the Company’sbusiness operation, therefore, the Company nominated him as Director.
Yasushi Saito(October 16, 1958)

12

Past experience and significant concurrent positions
April 1982
June 2011
June 2016(Notes)1. There are no special interests between each candidate and the Company.
2. Responsibilities of the candidates at the Company who are incumbent Directors of the Company are as stated in the Business
Report (pages 11 through 12).
Additionally, the three Directors, Mr. Minoru Makihara, Mr. Shigemitsu Miki and Mr. Koji Miyahara are incumbent Outside
Directors of the Company.
3. Matters regarding the candidates for Outside Director are as follows.
(1) Three Directors, Mr. Minoru Makihara, Mr. Shigemitsu Miki and Mr. Koji Miyahara are candidates for Outside Director andsatisfy the requirements for independent officers as stipulated by Tokyo Stock Exchange, Inc.
(2) Violation of laws and regulations, etc. at the companies where the candidates for Outside Director concurrently serve
1) Mr. Shigemitsu Miki・ At MITSUBISHI MOTORS CORPORATION, where Mr. Shigemitsu Miki served as Outside Audit & Supervisory Board
Member, it became apparent in September 2012 that machinery that utilized insulating oils that contained or possibly
contained PCB (polychlorinated biphenyl) were improperly disposed of. Additionally, from April 2016 onward, subsequent
to his retirement, it became apparent that improper methods were used to make fuel economy appear superior to actual
measurements and methods differing from domestic regulations were utilized for measurement of running resistance forthe acquisition of model approval for automobiles manufactured by said company.
Although he did not have prior knowledge of any of these facts, he had been calling for caution from the viewpoint ofcompliance with laws and regulations on a daily basis in the Audit & Supervisory Board, and for facts that were discovered
during his service, he instructed investigation and recurrence prevention measures, etc., and fulfilled his duties.
・ At Mitsubishi Electric Corporation, where Mr. Shigemitsu Miki served as Outside Director, said company received a ceaseand desist order and an order for payment of surcharge from the Fair Trade Commission in November 2012 due to actions
in violation of the Antimonopoly Act for the sale of certain automobile components, concluded a judiciary transaction
agreement with the U.S. Department of Justice for the payment of fines, etc. in September 2013, an order for payment ofsurcharge from The National Development and Reform Commission in China in August 2014, an order for payment ofsurcharge from the European Commission in January 2016, and an order for corrective measures and an order for paymentof surcharge from the Korea Fair Trade Commission in February 2016.
Although he did not have prior knowledge of any of these facts, he had been calling for caution from the viewpoint ofcompliance with laws and regulations on a daily basis in the Board of Directors meetings, etc., and subsequent to discoveryof these facts, he has conducted thorough investigations to seek the causes and has provided advice, etc. regarding
measures to further strengthen the compliance structure, etc. at the Board of Directors meetings, etc.

482) Mr. Koji Miyahara・ At Nippon Yusen Kabushiki Kaisha, where Mr. Koji Miyahara served as Director, said company received a cease anddesist order and an order for payment of surcharge from the Fair Trade Commission in March 2014 due to actions inviolation of the Antimonopoly Act for marine transport operations for automobiles, and concluded a judiciary transaction
agreement with the U.S. Department of Justice for the payment of fines, etc. in December 2014. Additionally, in December
2015, a judgment was received from The National Development and Reform Commission in China regarding said
operations that it was in violation of the Antimonopoly Act of said country.
・ At Nippon Cargo Airlines, Co., Ltd., where Mr. Koji Miyahara served as Director, said company received an order for
payment of surcharge from the Fair Trade Commission in Korea in November 2010 due to actions in the international air
cargo transportation business that were in violation of the Fair Trade Law in Korea, and the orders were finalized forJapan-originating, South Korea-bound matters in May 2014, and South Korea-originating, worldwide-bound matters in
September 2014, respectively.
(3) Mr. Shigemitsu Miki receives remuneration as Senior Advisor from The Bank of Tokyo-Mitsubishi UFJ, Ltd., an entity that hasa special relationship with the Company (a major business partner).
(4) Years of service as Outside Directors of the Company since their first appointment (until the conclusion of this year’s Annual
General Meeting of Shareholders)Mr. Minoru Makihara: 24 years
Mr. Shigemitsu Miki: 8 years
Mr. Koji Miyahara: 3 year

Proposal No. 4

Payment of Bonuses to Directors

Taking into consideration the performance of the current term, among other factors, we propose to pay bonuses
to Directors at the amount of 50,000,000 yen to fourteen (14) Directors (including the amount of 4,500,000 yen to
three (3) Outside Directors) as of the end of the fiscal year under review.
End

49

Instructions for Voting via the Internet
If you exercise your voting rights via the Internet, please view “4. Information on Exercise of Voting Rights” onpage 2 and the following matters before you exercise your rights by 5 p.m. on Wednesday, June 28, 2017.
1. About the voting rights exercise website(1) For the exercise of voting rights via the Internet (available in Japanese only), please use the voting rights
exercise website (http://www.evote.jp/) designated by the Company from either a personal computer or
smartphone. (However, the website will be inactive between 2 a.m. and 5 a.m. each day.)(Note) Voting rights cannot be exercised by feature phone, PDA, or gaming devices, etc.
(2) If firewalls, etc., are in use for the Internet connection, antivirus software is in use, or proxy servers are in use,
etc., it may not be possible to use the website depending upon the Internet environment of the shareholder.
(3) Although the exercise of voting rights via the Internet will be available until 5 p.m. on Wednesday, June 28,
2017, please exercise in advance in consideration of vote counting, and please contact our inquiry in 4. below
with any questions, etc.
2. Exercise method for voting rights via the Internet(1) Please use the “Login ID” and “Temporary password” on the enclosed Voting Rights Exercise Form on theabove voting rights exercise website, and indicate your vote for or against the proposals by following theon-screen instructions.
(2) To prevent unauthorized access by non-shareholders (so-called “spoofing”) and falsification of the content of
the exercise of voting rights, the Company requests the modification of the “Temporary password” via thevoting rights exercise website.
3. Expenses arising due to accessing the voting rights exercise website
Please note that the shareholder is solely responsible for any expenses (Internet connection fees, etc.) incurred
while accessing the voting website.
4. Inquiries
Stock Transfer Agency Department (Help Desk), Mitsubishi UFJ Trust and Banking Corporation
Telephone: 0120-173-027 (Toll-free)Business Hours: 9 a.m. ~ 9 p.m. (Japan time)< For institutional investors>
Institutional investors may exercise your voting right using the voting platform operated by ICJ, Inc.

50